A positive market in the US overnight was buoyed by positive demand for grain and oilseeds, and a questionable weather outlook for the next 2-3 weeks. The western corn belt of, Nebraska, Kansas, Missouri and Iowa, is expected to receive minimal rain for the next 10-14 days, and temps are expected to increase putting pressure on developing crops. The eastern corn belt of Illinois, Indiana and Ohio are expecting only moderate increases in temps, but with scattered showers and soil moisture in the area expected to enable both corn and soybeans crops to continue reasonable development. The corn crop is progressing well, with 68% of the crop considered good to excellent, whilst silking, remains behind the 5 year average by 14%, a sign of the lateness of the crop, and its vulnerability to high temperatures and moisture stress as the crop enters its key reproductive cycle. Soybeans advanced on confirmation of another sale of 120Kmt into China for 13/14, and tight ending stocks keeping domestic US basis firm. The soybean crop condition was released, unchanged from last week at 67% good to excellent. Wheat’s positive finish was attributed to the purchase of another 840Kmt of Chicago style Soft Red Winter wheat by the Chinese. The USDA are now talking up the possible import of wheat by China reaching 6.5 – 7.5mmt, more than double that forecast just a couple of weeks ago.
The cotton market was hung up on a lower volume trading day. The December contract finished only 30pts higher, buyers pushed the market up from its lows to near 86 cents, but seller seemed to have the upper hand for most of the day, keeping gains under wraps. Ecom’s prices today are $488 for current crop and $487 for new crop, US dollar and On-call contracts might just be the option to help you reach the $500 everyone is searching for.
The Aussie found some support overnight, putting on a cent in the European and US Trading session’s, profit taking seemed the main reason, with a significant amount of resistance at the .9040 level, where it has held its ground on a number of occasions recently. Mr Bernanke speaks towards the end of the week, and our unemployment figures will be the data to listen out for, and hopefully provide our currency with a clear direction.
Domestically, new crop APW prices are remaining firm, thanks to our lower dollar. Sorghum is coming under pressure from its lack of in spec grain, and the relative abundance of cheap wheat, which the trade has held since harvest time, now making its way into end users rations, instead of sorghum. We have seen some interest in new crop Durum, offering a small premium to bread wheat that may be of interest to growers also